Kristen Gale, CEO and founder of beauty bar The Ten Spot, faced huge hurdles when she decided to franchise her business. But her resilience paid off as there are now 47 locations, including several in the U.S.Supplied
If Kristen Gale knew what she was getting into, she probably wouldn’t have franchised her beauty bar business. As she prepares to open its 47th location, she’s thankful for her naiveté.
The chief executive officer and founder of The Ten Spot opened her first location on Toronto’s Queen Street in 2006 at the age of 24, after getting fired from an unpaid internship and downsized out of her first job.
“At the time, 18 years ago, there was the very fancy, very expensive, ‘just go with your mom so she can pay for you’ kind of spas, and then the lower end nail salons,” Ms. Gale says. “I thought, ‘what if I took the best of the high-end market, the great guest care and the clinical cleanliness, and combined it with the affordability and the more casual vibe of the lower end salon?’”
The concept was such a hit that soon after Ms. Gale opened a second location in Toronto’s Leslieville neighbourhood and began planning two more: one on Bloor West and another in Hamilton. That’s when Ms. Gale decided that the best way to meet the demand was to become a franchisor, which she assumed was as simple as going to a lawyer and filling out the necessary paperwork.
“It was a steep, scary, awful, humbling lesson to realize that [franchisees are] not my managers, they are business owners,” she says. “My business model – that used to be manis, pedis, waxing and facials, and my guests are the people coming in for those services – was now getting someone from not knowing anything about how to run a business, how to run a spa business, how to run a Ten Spot business, fully trained and open and operational. Those were now my customers.”
In 2011, as her first two franchisees were asking some very basic questions about how to run and operate the business – the answers to which Ms. Gale says existed only in her head – the entrepreneur was preparing to give birth to her son.
“There’s a picture of me nursing him, day one of him being alive, with my laptop beside me, while texting,” she says. “It was tough; tough talks, tough decisions, lots of scrambling, lots of late nights, just to get from 10 steps behind where I needed to be to just one step ahead.”
Adversity in entrepreneurship is unavoidable, but those who can muster the resilience to overcome the obstacles typically emerge stronger and better prepared for what comes next.
Ms. Gale says The Ten Spot’s franchising model is now a well-oiled machine, with well-defined systems, policies, protocols and manuals to guide new owners through each step of the process. The experience also prepared her for the next time she felt a little in over her head, when she recently began expanding south of the border.
“That’s another time where I just didn’t realize what I was getting into,” she says, adding that she felt more confident confronting this latest “trial by fire” knowing that she had overcome similar challenges before. Today, The Ten Spot has four locations in the United States, with more on the way.
Like Ms. Gale, Erin Bury also found herself navigating unexpected challenges as she scaled her business. The CEO of online estate planning platform Willful – which she co-founded with her husband Kevin Oulds in 2017 – believed that the only way for the company to achieve its full potential was by funding rapid growth with investor dollars.
By 2021, the company had raised about $1.5-million, but as Ms. Bury looked to raise another $3-million to $5-million early last year, she discovered that the market had changed.
The economic climate has been particularly challenging for tech startups in recent years, with increased market volatility and investor caution owing to factors such as high inflation and changing consumer behaviours. For entrepreneurs like Ms. Bury, navigating these complexities has required a significant shift in strategy and mindset.
“We found immediately that it was a challenging landscape because of the economic climate,” she says. “Investors weren’t accepting these frothy valuations that companies got in years prior, and they were just writing fewer cheques.”
Ms. Bury says her first reaction was to work harder, dedicating hundreds of hours over months to refine her pitch, network, reach out and meet with investors. But ultimately she couldn’t find the deal she was looking for. At the same time, Ms. Bury says she was seeing technology companies that had raised big funding rounds undergo massive cuts and layoffs. That’s when she started to question whether those dollars were necessary.
“I had to shift my mindset from raising funding and being on this tech rocket ship unicorn, to focusing more on running a healthy business, caring more about profitability, caring more about autonomy, and not having to rely on investors, because that’s really unpredictable,” she says.
Research supports this shift in perspective. A study published in the Journal of Global Entrepreneurship Research found a strong link between entrepreneurial resilience and success at both individual and organizational levels. It highlighted that resilience is key in navigating challenges and emerging stronger on the other side.
In the end, Willful raised $1.1-million, mostly from its existing investors, while pivoting its strategy from growth at all costs, to profitability.
Reflecting on the lessons learned, Ms. Bury highlights the value of stepping off the relentless pursuit of funding: “I think the key learning is that you don’t have to be on that investor hamster wheel forever,” she says. “I’ve done it before, and it took me away from what brings me joy, which is working on the product, working with our team, and trying to impact as many Canadians as possible.”